by RAY FLEMING
PRESIDENT Bush arrived yesterday for Israel's 60th anniversary with virtually nothing to show for his much-hyped two-state initiative launched at the Annapolis conference last November. Talks between the Israeli government and the Palestinian Authority are at a standstill and prime minister Olmert is under embarrassing pressure over donations from an American businessman. In a speech on his arrival Mr Bush said he was still confident that there was a chance “to get something defined” about a Palestinian state by the deadline he has set of the end of the year. A draft definition on paper, perhaps. The reality? No chance.

The only sign of progress yesterday was Tony Blair's proposal for economic development in the town of Nablus in the northern West Bank by creating an economic and security free zone and industrial park where Palestinian entrepreneurs could set up businesses; an essential part of the project is a reduction in the number of Israeli check points so that manufacturers and traders could move freely into their markets. This is not a new idea; it was first proposed in 1997 but found no support. Israel has shown some heavily qualified interest in it this time round.

Mr Blair, in his envoy role for the Quartet (EU, Russia, UN, US) is adopting the principle of incremental improvement - rather than grand gesture - that proved successful in Northern Ireland. It may be the better approach but it will take years rather than Mr Bush's months.